Welcome back Meta-Traders.The 3rd quarter of 2011 came to an end on Friday and without the typical month-end, quarter-end fanfare and window dressing rally. In fact it was the other way around with the bears firmly in control.
Stocks had their worst quarter since the credit crisis in 2008 with the S&P loosing -7.8% for the month and -14.3% for the quarter. The blue-chip Dow Jones Industrial Average fared somewhat better, dropping only -6.03% for the month and -12.09% for the quarter.
Individual stocks told the story even more clearly with a AAPL tracing out a major top and selling off 20 points from the pivot at $400 and closing close to $380 for the week. AMZN was a similar story trading as high as $235 during the week on news of the release of its Kindle Fire, its competitor to the iPad. Amazon gave up the ghost as well and sold off ending the week at $216.
As for stock trading, I only made 2 trades this week. I sold AAPL at about $293 and took profits on the positions I slowly built up earlier in the sell-off. Also, I sold ULTA and took a nasty -8 point loss on a position I took just the week earlier. This was the wrong trade at the wrong time for the wrong reasons and I clearly need to be much more careful going forward.
As for stock positions, i'm still short the AMZN Oct 120 call which is looking good. I'm taking a beating on OIH, Oil Services ETF. I'm in the hole -26 points on this position and taking it on the chin. I should have capitulated already and will probably do so next week. I did some work with http://www.tc2000.com, and this ETF has gotten whacked harder than every major index (SPY, DIA), OIL ETF USO and even Goldman Sachs Commodity Index ETF GSG. Brutal, just fricking brutal.
Commodities got whacked as well, with the air continuing to come out of all related items, energy, materials, industrials, financials you name it. The ugly stick was swinging around wildly, whacking off capital and destroying value without discrimination.
The only thing that seems to be working in my direction is the Intel Oct 21-20 put spread which I put on for about $100 and if the stock closes below 20, I make $300. We'll see how that one works out.
All this wreckage in equity markets, was bullish for USD with the dollar rallying strongly against nearly all pairs. EUR/USD resumed its recent downtrend on Friday, but not before shaking out some shorts on an upside excursion to just under 1.37 earlier in the week. This trend continuation was positive for the COATL portfolios which trade USD such as Coatl H1 and Coatl USD-Centered Portfolio.
Atipaq Full Portfolio took no trades, but has some good unrealized gains on a set of long USD trades versus AUD and NZD which are up a combined 238 pips in unrealized gains.
The rest of the system results were pretty lackluster with the exception of the COATL H1 and COATL USD-Centered as I noted above.
Its worth pointing out that my Forex portfolio is up about +16% for the year, versus my equity portfolios which are down about -8% for the year. So that's positive and makes the case for continuing to diversity to Forex. My 5-year plan calls for increasing my forex portfolio to 20K by the start of 2012, so I need to start planning for that.
Also on a positive note, we just started the 4th quarter which is seasonally very good for stocks. So once we get October out of the way, the "Risk On" trade could come back very quickly as portfolio managers try to end the year on a good note. So while we ended the quarter on a bad note, we're looking for better times ahead.
Enjoy your weekend.
No comments:
Post a Comment